Ad-blocking Android app ordered to pay US$15,000 to video streaming service iQiyi by Shanghai court

PUBLISHED : Wednesday, 26 August, 2015, 7:00am
UPDATED : Wednesday, 26 August, 2015, 7:00am

An Android application which enabled users to watch videos on the popular Chinese streaming site iQiyi without adverts has been ordered to pay 100,000 yuan (US$15,610) in damages by a Shanghai court.

MoreTV is an app for Apple TV-style set-top boxes, smart televisions, and smartphones. It enables users to access multiple video streaming sites through one interface.

According to the Shanghai Pudong New Area People's Court however, while MoreTV did show users videos from various services, including iQiyi, it did not show those firm's adverts.

While iQiyi does offer users an ad-free option for a fee, the adverts are a key source of income for the company, it told the court. The firm sued the makers of MoreTV, Qianshan Network Technology and Yueguan Network Technology, for more than 1 million yuan.

The firms denied intentionally blocking the ads. They claimed that the videos and advertisements were served by iQiyi as separate files, and MoreTV only detected (and showed users) the video file.

The court ruled that by removing iQiyi's adverts, MoreTV was stealing potential paying users from the streaming video site, and had engaged in unfair competition.

As well as 100,000 yuan in damages, the court ordered MoreTV to bear iQiyi's court costs, and display a statement about the decision on its website for 72 hours.

This was the first time a Chinese court has ruled on ad-blocking technology. In May, a German court decided against broadcasters RTL and ProSiebenSat1 in an action against Eyeo, the maker of popular online ad-blocking software AdBlock Plus, the fourth such lawsuit the firm has won.

Around 50 million people use AdBlock Plus, according to Eyeo, with around 150 million worldwide utilising some sort of ad-blocking technology, according to Pagefair, a site which informs digital publishers when users are blocking ads.

Apple attracted controversy earlier this year when it announced that it would enable developers to build ad-blockers for iPhones and iPads, a move that one insider described as an "atomic bomb" for the ad industry.

Following the announcement that it hand landed the exclusive Chinese streaming rights to more than 800 Paramount films, iQiyi shot up the global app charts, rising to the sixth most downloaded iOS app worldwide, according to analytics firm App Annie.

Demonstrating the importance of its premium, ad-free service to its bottom line, iQiyi was also the ninth top iOS app in the world by revenue in July.